HydraDX Monthly - March 2024
Polkadot Hydration Campaign, Code4rena Audit Challenge, Memecoin Szn
Welcome to the March edition of the HydraDX monthly - our periodic newsletter which helps you stay up-to-date on the most hydrated matters.
The highlight of March is the approval of our two Polkadot Hydration Campaign proposals which received overwhelming support in OpenGov. The 2M DOT that will flow from the Polkadot Treasury into HydraDX by the end of April will be used to boost the liquidity on Polkadot’s biggest DEX.
Furthermore, the month of March saw the end of our audit challenge on Code4rena, and the beginning of the memecoin szn on HydraDX.
Read more on these headlines below, and also don’t forget to check out our Knowledge Centre, Dev Updates, and Governance Square.
Polkadot Hydration Campaign
In the beginning of March, the HydraDX Protocol submitted two OpenGov referenda which proposed to allocate 2M DOT from the Polkadot Treasury with the goal to improve the liquidity landscape in our ecosystem, making sure we are well prepared for the upcoming DeFi Summer. We are thrilled to share that both referenda were approved by an overwhelming margin (85% of the cast votes).
Once executed, Referendum #560 will LP 1M DOT into the HydraDX Omnipool, effectively increasing the current DOT TVL by 3.8x. The LP position is non-custodial, meaning that it will remain under the control of the Polkadot Protocol. Being the asset with the highest volume in the Omnipool, this additional liquidity will improve the trading efficiency for a majority of users who use DOT for swaps on HydraDX. This includes occasional traders, DAOs, and the Polkadot Treasury itself which has a long-running DCA order to diversify 3.5M+ DOT into stablecoins using HydraDX.
In parallel, Referendum #561 will provide another 1M DOT that will be used to incentivise LPing into DOT, another 8+ ecosystem assets, iBTC, vDOT, and native stablecoins. Besides improving the depth of liquidity across the board, which translates into more efficient trading and higher volumes, the incentives aim to send out a signal that Polkadot DeFi is open for business and to onboard new users into our ecosystem.
The current estimate is that the funds from both referenda will be sent to HydraDX some time in the third week of April. Once this has happened, the Protocol will initiate the governance procedures necessary to deploy the funds. We will also kick off a broad marketing campaign with our partners from the Polkadot ecosystem and beyond.
The current target for launching the Polkadot Hydration Campaign is in the beginning of May.
Code4rena Audit Challenge
HydraDX completed its first crowdsourced audit challenge which took place in the period February 2nd - March 1st on the leading platform Code4rena. Offering a generous prize pool of $100,000, the challenge incentivised 27 independent security researchers to submit their audit reports. The audit was co-funded by the Polkadot Assurance Legion, an ecosystem security initiative spearheaded by HydraDX.
The audit challenge is yet another testament to the central importance which HydraDX places on security. For a majority of the participants, this was the first Rust audit in Polkadot. To make their onboarding into our ecosystem as smooth as possible, HydraDX core contributors were made available to provide general guidance and answer specific questions. We believe that this is time well spent, as these newly onboarded researchers have now obtained the skillset necessary for participating in future Polkadot audits and bug bounty programs.
The scope of the HydraDX challenge covered the Omnipool, Stablepools, Oracles and the Circuit Breaker. The idea of having “more eyes on code” proved to be effective: The audit helped us identify one critical issue in Stableswap which was mitigated immediately by using targeted function pausing, and fully resolved in the runtime release v24.0.0. All other findings from the report were classified by the HydraDX security team as not being a concern (although categorisation by the Code4rena judges may differ).
You can find the full audit report in the HydraDX-security repo or on the Code4rena website.
Memecoin Szn on HydraDX
With the launch of DED and PINK, the month of March saw the beginning of the Polkadot memecoin season. This coincided with the deployment of our permissionless asset registry, which allows anyone to register an asset on the HydraDX chain, create an Isolated Pool and provide liquidity - all of this without the need to pass through the HydraDX governance.
Leveraging this new permissionless feature-set, a trading pool for DED was deployed which made HydraDX the first venue of liquidity for this asset. This resulted in some dynamic price action and soaring volumes.
Also PINK made its debut in a HydraDX Isolated Pool, however following a slightly different route. A HydraDX Referendum decided to use the PINK that was airdropped to the HydraDX Protocol in order to create a DOT<>PINK Isolated Pool. To achieve this, half of the PINK allocation was swapped via OTC for DOT, and the pool was created.
Happy memecoining:
https://app.hydradx.io/trade/swap
Knowledge Centre
HydraDX contributors participated at the 2024 sub0 edition in Bangkok with 2 security-oriented talks:
Martin Hloska - Fuzzing on Steroids with Invariants
Jakub Panik - XCM Rate Limiters
Dev Updates
Permissionless Asset Registry
SHIPPED ✅
Money Market
Description: Allowing users to lend their assets as collateral to earn fees and borrow assets against those positions - alternatively those collateral positions can be used to mint the stablecoin HOLLAR.
Notes:
Runtime & UI implementation ongoing.
Oracles by DIA online.
HOLLAR Stablecoin
Description: Intrinsically linked to the Money Market - HOLLAR stablecoin can be minted by providing collateral.
Notes:
Runtime & UI implementation ongoing.
Order Matching Engine
Description: 😶🌫️
Notes:
Runtime research & specification ongoing.
Other developments
Significant UI performance improvements - SHIPPED ✅
Next-gen XCM UI V2 & V3
V3 (inclusion of direct Ethereum <> HydraDX bridge) ongoing
Liquidity Mining for Isolated Pools - https://github.com/galacticcouncil/HydraDX-node/pull/798
Governance Square
Ongoing
Passed
Ref #130 - Refund MRL trapped assets
Ref #129 - Authorize upgrade to v24.0.1
Ref #128 - Stop DOT & vDOT HDX yield farms
Ref #127 - Authorize upgrade to v24.0.0
Ref #126 - Proceed with rebrand to Hydration
Ref #125 - Ratify Polkadot Hydration Liquidity Incentives Campaign
Ref #124 - Add CRU to Omnipool
Ref #123 - Accept & send HRMP requests - Pendulum
Ref #122 - System remark: Add CRU to Omnipool
Ref #121 - Authorize upgrade to v23.1.0
Ref #120 - Increase multiplier for HDX vDOT farm to 2x
Ref #118 - DCA 280,000 USDT to DOT
Ref #117 - LAUNCH NATIVE USDC/ USDT 2-POOL
Ref #116 - Transfer DOT from HydraDX Treasury and Stake on Polkadot Relay Chain
HydraDX Omnipool Basics
About HydraDX
HydraDX is a next-gen DeFi protocol that is designed to bring an ocean of liquidity to Polkadot. Our tool for the job is the HydraDX Omnipool - an innovative Automated Market Maker (AMM) which unlocks unparalleled efficiencies by combining all assets in a single trading pool. Besides more efficient trading, the Omnipool design enables single-sided LPing. Visit the HydraDX website to find out more.
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